Pilgrims Pride invests in manufacturing network

Pilgrim's Pride invests in manufacturing network

Pilgrim's Pride is consolidating its manufacturing operations in a move that will see it close a facility in Alabama, where 1,100 people are currently employed.

From the end of January, the US chicken processor will transfer production from its plant in Boaz to operations in Russellville, also in Alabama, and Douglas in Georgia. Current production levels will be maintained and around 100 jobs will be added at Russellville and Douglas.

In a statement released yesterday (19 November), Pilgrim's Pride said the factory closure was part of its drive to generate cost savings of US$200m in 2014. The company said that it expects to generate more than $20m in incremental margin by using the capacity in its network more effectively.

Pilgrim's Pride also revealed plans to invest further in two other facilities. The group will spend $10m to upgrade its feed mill in Falkville, Alabama, and $25m to expand a deboning plant in Mt. Pleasant, Texas.

"Today's announcement reflects the strength of our balance sheet, our willingness to strategically invest in our business and our continued commitment to the pursuit of operational excellence," president and CEO Bill Lovette said. "Given our decision to consolidate operations, our intent is to offer retention incentives to encourage many of our Boaz team members to remain with the company in different capacities."

Show the press release

Pilgrims Announces Strategic Investments; Operational Streamlining
GREELEY, Colo., Nov. 19, 2013 (GLOBE NEWSWIRE) -

- Pilgrim's Pride Corporation (Nasdaq:PPC) today announced several operational changes to improve efficiencies as part of its goal to generate approximately $200 million in savings in 2014. Effective January 24, 2014, Pilgrim's will expand its operations in Russellville, Ala., and Douglas, Ga., to absorb the current fresh poultry processing operations in Boaz, Ala. This consolidation will allow the company to maintain current production levels, more efficiently utilize idle capacity and generate more than $20 million in incremental margin. In addition, the company will invest approximately $10 million to upgrade its feed mill in Falkville, Ala., and add approximately 100 jobs at the Douglasand Russellville operations.

"Today's announcement reflects the strength of our balance sheet, our willingness to strategically invest in our business and our continued commitment to the pursuit of operational excellence," said Bill Lovette, President and CEO of Pilgrim's Pride Corporation. "Given our decision to consolidate operations, our intent is to offer retention incentives to encourage many of our Boaz team members to remain with the company in different capacities. We are confident these capital improvement projects will position the company, our stakeholders and our team members for success for many years to come."

Purchased by Pilgrim's in 2007, Boaz is the company's smallest operation in terms of processing capacity and employs approximately 1,100 people.  Many Boaz employees will be offered opportunities at other nearby Pilgrim's operations and all employees will be offered retention incentives. The company anticipates that contract growers who currently supply the Boaz operation will have an opportunity to meet the enhanced supply needs ofPilgrim's operations in Russellville and Douglas.

Pilgrim's, consistent with its long-term strategy to align the company's core competencies with customer needs, will also invest approximately $25 million to expand large bird deboning capacity and modernize utilities at its Mt. Pleasant, Texas, facility.  The company previously announced an investment of $25 million to upgrade its feed mill and processing operations in Enterprise, Ala.

The strategic decisions announced today will allow Pilgrim's to optimize its operational network and efficiently deploy resources and capital to facilities with improved infrastructure, greater scale and more favorable opportunities for long-term, sustainable profitability

Original source: Pilgrim's Pride